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EXHIBIT 10.13
[ DELANO LOGO ]
DELANO TECHNOLOGY CORP0RATION
EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the Employee Stock Purchase Plan
(herein called the "Plan") of Delano Technology Corporation.
1. PURPOSE. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Shares of
the Company through payroll deductions. It is the intention of the Company that
the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the
Internal Revenue Code of 1986, as amended. The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company, or to the extent
authorized by the Board, a Committee of the Board.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Shares" means the Common Shares of the Company.
(d) "Company" means Delano Technology Corporation and Designated Subsidiaries
of the Company.
(e) "Compensation" means base pay, plus any amounts attributable to overtime,
shift premium, incentive compensation, bonuses and commissions.
(f) "Designated Subsidiaries" means the Subsidiaries which have been designated
by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(g) "Employee" means any individual who is an Employee of the Company for tax
purposes whose customary employment with the Company is at least twenty
(20) hours per week and more than five (5) months in a calendar year. For
purposes of the Plan, the employment relationship will be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved in writing by the Company. Where the period of leave
(other than a personal leave of absence) exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute or
by contract, the employment relationship shall be deemed to have terminated
on the 91st day of such leave. In the case of a personal leave of absence,
the employment relationship shall be deemed to have terminated on the
commencement date.
(h) "Enrollment Date" means the first Trading Day of each Offering Period.
(i) "Exercise Date" means the last Trading Day of each Purchase Period.
(j) "Fair Market Value" means, as of any date, the value of the Common Shares
determined by the Board based on such factors as the Board determines
relevant, provided however, that if there is a public market for the Common
Shares the fair market value will be determined as follows:
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(1) If the Common Shares are listed on any established stock exchange or a
national market system, their Fair Market Value shall be the closing
sales price for such shares (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market
trading day on or prior to the date of such determination, as reported
in The Wall Street Journal or such other source as the Board deems
reliable; or
(2) If the Common Shares are regularly quoted by a recognized securities
dealer but selling prices are not reported, their Fair Market Value
shall be the mean of the closing bid and asked prices for the Common
Shares on or prior to the date of such determination, as reported in
The Wall Street Journal or such other source as the Board deems
reliable.
(k) "Offering Date" means the first day of each Offering Period of the Plan.
(l) "Offering Period" means a period of twenty-four (24) months consisting of
four six-month Purchase Periods during which options granted pursuant to
the Plan may be exercised. The duration and timing of Offering Periods may
be changed pursuant to Sections 4 and 19 of this Plan.
(m) "Plan" means this Employee Stock Purchase Plan.
(n) "Purchase Period" means the approximately six-month period commencing after
one Exercise Date and ending with the next Exercise Date, except that the
first Purchase Period of any Offering Period will commence on the
Enrollment Date and end with the next Exercise Date.
(o) "Purchase Price" means 85% of the Fair Market Value of a Common Share on
the Enrollment Date or on the Exercise Date, whichever is lower; provided
however, that the Purchase Price may be adjusted by the Board pursuant to
Section 19.
(p) "Reserves" means the number of Common Shares covered by each option under
the Plan that has not yet been exercised and the number of Common Shares
that have been authorized for issuance under the Plan but not yet placed
under option.
(q) "Subsidiary" means any corporation, domestic or foreign, in which the
Company or a Subsidiary owns, directly or indirectly, 50% or more of the
voting shares, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
(r) "Trading Day" means a day on which national stock exchanges and the Nasdaq
System are open for trading.
3. ELIGIBILITY.
(a) GENERAL RULE. Any Employee who is employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan, subject to
the requirements of Section 5(a) and the limitations imposed by Section
423(b) of the Code.
(b) EXCEPTIONS. Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan if (i) immediately after
the grant, such Employee (or any other person whose stock ownership would
be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock and/or hold outstanding options to purchase shares
possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any
Subsidiary, or (ii) the rate of withholding under such option would permit
the employee's rights to purchase shares under all employee stock purchase
plans (described in Section 423 of the Code) of the Company and its
subsidiaries to accrue (i.e., become exercisable) at a rate which exceeds
Twenty-Five Thousand Dollars ($25,000) of fair market value of such shares
(determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
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4. OFFERING PERIODS. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after February 1 and August 1 each year, or on such other date
as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval, if such change is
announced prior to the scheduled beginning of the first Offering Period to be
affected thereafter.
5. PARTICIPATION.
(a) An eligible Employee may become a participant in the Plan by completing a
subscription agreement authorizing payroll deductions in the form provided
by the Company and filing it with the Company prior to the applicable
Enrollment Date, unless a later time for filing the subscription agreement
is set for all eligible Employees with respect to such Offering Period.
Unless otherwise determined by the Board, an eligible Employee may
participate in only one Offering Period at a time.
(b) Payroll deductions for a participant shall commence with the first payroll
following the Enrollment Date (or as soon as administratively feasible) and
shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the participant as
provided in Section 10.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his or her subscription agreement, he or
she shall elect to have payroll deductions made on each payday during all
subsequent Offering Periods at a rate not exceeding fifteen percent (15%),
or such other rate as may be determined from time to time by the Board, of
the Compensation which he or she would otherwise receive on such payday
without regard to deferral elections, provided that the aggregate of such
payroll deductions during any Offering Period shall not exceed fifteen
percent (15%), or such other percentage as may be determined from time to
time by the Board, of the aggregate Compensation which he or she would
otherwise have received during said Offering Period.
(b) All payroll deductions authorized by a participant shall be credited to his
or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan as
provided in Section 10, or may change the rate of his or her payroll
deductions during an Offering Period by completing and filing with the
Company a new authorization for payroll deduction. The Board may, in its
discretion, limit the number of participation rate change in any Offering
Period. The change in rate shall be effective as soon as administratively
feasible following the Company's receipt of the new authorization. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10.
(d) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 3(b) of the Plan, a participant's
payroll deductions may be automatically decreased to zero percent (0%) at
any time during a Purchase Period. Payroll deductions shall recommence at
the rate provided in such participant's subscription agreement at the
beginning of the first Purchase Period which is scheduled to end in the
following calendar year, unless terminated by the participant as provided
in Section 10.
(e) At the time the option is exercised, in whole or in part, or at the time
some or all of the Company's Common Shares issued under the Plan are
disposed of, the participant must make adequate provision for the Company's
federal, state or other tax withholding obligations, if any, which arise
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on the exercise of the option or the disposition of the Common Shares. At
any time the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to
make available to the Company any tax deductions or benefits attributable
to sale or early disposition of Common Shares by the Employee.
7. GRANT OF OPTION. On each Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) a number of Common Shares arrived at by dividing such
Employee's payroll deductions to be accumulated prior to such Exercise Date and
retained in the Employee's account as of the Exercise Date by the applicable
Purchase Price; provided that the maximum number of shares a participant may
purchase during each Offering Period shall be determined by (i) dividing $40,000
by the Fair Market Value of a share of the Company's Common Shares on the
Offering Date or (ii) if less, by the "Maximum Cap" set for such Offering
Period; and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12. The "Maximum Cap" for each
Offering Period shall be the number of shares purchasable under the Plan during
that Offering Period with the maximum payroll deductions permitted by Section
6(d), based on the Fair Market Value of the Common Shares at the beginning of
the Offering Period. The Board may, for future Offering Periods, increase or
decrease, in its absolute discretion, the maximum number of Common Shares an
Employee may purchase during each Purchase Period of such Offering Period.
Exercise of the option shall occur as provided in Section 8 of the Plan, unless
the participant has withdrawn pursuant to Section 10. The option shall expire on
the last day of the Offering Period.
8. EXERCISE OF OPTION.
(a) Unless a participant withdraws from the Offering Period as provided in
Section 10, his or her option for the purchase of shares will be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to option will be purchased at the applicable Purchase Price with
the accumulated payroll deductions in his or her account. No fractional
shares will be purchased. Any payroll deductions accumulated in a
participant's account that are not sufficient to purchase a full share will
be retained in the participant's account for the subsequent Purchase Period
or Offering Period, subject to earlier withdrawal by the participant as
provided in Section 10. The shares purchased upon exercise of an option
hereunder shall be deemed to be transferred to the participant on the
Exercise Date. During his or her lifetime, a participant's option to
purchase shares hereunder is exercisable only by the participant.
(b) If the Board determines that, on a given Exercise Date, the number of
shares with respect to which options are to be exercised may exceed (i) the
number of Common Shares that were available for sale under the Plan on the
Enrollment Date of the applicable Offering Period, or (ii) the number of
shares available for sale under the Plan on such Exercise Date, the Board
may in its sole discretion provide that the Company shall make a pro rata
allocation of the Common Shares available for purchase on such Enrollment
Date or Exercise Date, as applicable, in as uniform a manner as shall be
practicable and as it shall determine in its sole discretion to be
equitable among all participants exercising options to purchase Common
Shares on such Exercise Date, and (x) continue all Offering Periods then in
effect, or (y) terminate any or all Offering Periods then in effect
pursuant to Section 19. The Company may make pro rata allocation of the
shares available on the Enrollment Date of any applicable Offering Period
pursuant to the preceding sentence, notwithstanding any authorization of
additional shares for issuance under the Plan by the Company's shareholders
subsequent to such Enrollment Date.
9. DELIVERY. The shares purchased by participants will be issued
electronically by the Company's transfer agent to a participant's custodial
account as soon as practicable after each Exercise Date. Shares purchased under
the Plan will be issued only in the name of the participant (or, if his or her
authorization so designates, in the name of the participant and another person
of legal age as joint tenants with rights of survivorship). The custodial
account of participants shall be maintained by a bank, broker-dealer or similar
custodian that has agreed to hold such shares for the accounts of the respective
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participants. Fees and expenses of the bank, broker-dealer or similar custodian
shall be paid by the Company or allocated among the respective participants in
such manner as the Board determines. A participant or his or her legal
representative may withdraw shares from his or her custodial account at any
time; however any withdrawal within 2 years of the first day of the Purchase
Period and one year of the Exercise Date will be treated by the Company as a
disqualifying disposition under the Code and be reported on the participant's
tax Form W-2. For participants residing in Canada and subject to Canadian law,
disposition may occur at any time or times without any similar limitations until
they are imposed by the Board with respect to any purchases made to such
participants after notice of any such hold requirement is imposed.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all, but not less than all, the payroll
deductions credited to his or her account and not yet used to exercise his
or her option under the Plan at any time by giving written notice to the
Company on a form provided for such purpose. All of the participant's
payroll deductions credited to his or her account will be paid to the
participant as soon as practicable after receipt of the notice of
withdrawal, his or her option for the current Offering Period will be
automatically canceled, and no further payroll deductions for the purchase
of shares will be made during such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions will not resume at
the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) Upon a participant's ceasing to be an Employee for any reason, including
retirement or death, he or she will be deemed to have elected to withdraw
from the Plan and the payroll deductions accumulated in his or her account
during the Offering Period but not yet used to exercise the option will be
returned to him or her as soon as practicable after such termination or, in
the case of death, to the person or persons entitled thereto under Section
14, and his or her option will be automatically canceled. The preceding
sentence notwithstanding, a participant who receives payment in lieu of
notice of termination of employment shall be treated as continuing to be an
Employee for the participant's customary number of hours per week of
employment during the period in which the participant is subject to such
payment in lieu of notice.
(c) A participant's withdrawal from an Offering Period will not have any effect
upon his or her eligibility to participate in a succeeding Offering Period
or in any similar plan which may hereafter be adopted by the Company.
11. AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. To the extent permitted
by any applicable laws, regulations or stock exchange rules, if the Fair Market
Value of the Common Shares on any Exercise Date in an Offering Period is lower
than the Fair Market Value of the Common Shares on the Enrollment Date of such
Offering Period, then all participants in such Offering Period will be
automatically withdrawn from such Offering period immediately after the exercise
of their option on such Exercise Date and automatically reenrolled in the
immediately following Offering Period as of the first day thereof.
12. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. COMMON SHARES.
(a) Subject to adjustment upon changes in capitalization of the Company as
provided in Section 18, the maximum number of Common Shares which shall be
reserved for sale under the Plan shall be an initial reservation of
1,000,000 shares. The shares to be sold to participants in the Plan may be,
at the election of the Company, either treasury shares or shares authorized
but unissued. If the total number of shares which would otherwise be
subject to options granted pursuant to Section 7(a) hereof on the Offering
Date of an Offering Period exceeds the number of shares then available
under the Plan (after deduction of all shares for which options have been
exercised or are then outstanding), the Company shall make a pro rata
allocation of the shares
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remaining available for option grant in as uniform and equitable a manner
as is practicable. In such event, the Company shall give written notice of
such reduction of the number of shares subject to the option to each
participant affected thereby and shall similarly reduce the rate of payroll
deductions if necessary and return any excess funds accumulated in each
participant's account as soon as practicable after the affected Exercise
Date of such Offering Period.
(b) The participant will have no interest or voting rights in shares covered by
his or her option until such option has been exercised.
14. ADMINISTRATION. The Plan shall be administered by the Board or a committee
of members of the Board appointed by the Board. The Board or its committee shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan. Every finding, decision and determination made by
the Board or its committee shall, to the full extent permitted by law, be final
and binding upon all parties.
15. TRANSFERABILITY. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way by the participant. Any such attempt at assignment,
transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance with
Section 10.
16. USE OF FUNDS. All payroll deductions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.
17. REPORTS. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees at
least annually, and will set forth the amounts of payroll deductions, the
Purchase Price, the number of shares purchased and the remaining cash balance,
if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the Reserves, the maximum number of shares
each participant may purchase each Purchase Period (under Section 7), as
well as the price per share and the number of Common Shares covered by each
option under the Plan that has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of
issued Common Shares resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Shares or any
other increase or decrease in the number of shares of Common Shares
effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of any class, or
securities convertible into shares of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of Common Shares subject to option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress will be
shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless otherwise provided by the Board. The New
Exercise Date shall be before the date of the Company's proposed
dissolution or liquidation. The Company shall notify each participant in
writing prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise
Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10.
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(c) MERGER OR ASSET SALE. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each option under the Plan shall
be assumed or an equivalent option shall be substituted by the successor
corporation or a parent or Subsidiary of the successor corporation. If the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods then in progress shall be shortened by setting a new
Exercise Date (the "New Exercise Date") and any Offering Periods then in
progress shall end on the New Exercise Date. The New Exercise Date shall be
before the date of the Company's proposed sale or merger. The Board shall
notify each participant in writing prior to the New Exercise Date, that the
Exercise Date for the participant's option has been changed to the New
Exercise Date and that the participant's option will be exercised
automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in
Section 10.
The Board may, if it so determines in the exercise of its sole discretion,
so make provision for adjusting the Reserves, as well as the price per
Common Share covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding
Common Shares, and in the event of the Company being consolidated with or
merged into any other corporation.
19. AMENDMENT OR TERMINATION.
(a) The Board of Directors of the Company may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 18, no such
termination will affect options previously granted, provided that an
Offering Period may be terminated by the Board on any Exercise Date if the
Board determines that the termination of the Offering Period or the Plan is
in the best interests of the Company and its shareholders. Except as
provided in Section 18 and this Section 19, no amendment may make any
change in any option theretofore granted which adversely affects the rights
of any participant. In addition, to the extent necessary to comply with
Section 423 of the Code (or any successor rule or provision or any other
applicable law, regulation or stock exchange rule), the Company shall
obtain shareholder approval in such a manner and to such a degree as
required.
(b) Without shareholder consent and without regard to whether any participant
rights may be considered to have been "adversely affected," the Board (or
its committee) shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding
in excess of the amount designated by a participant in order to adjust for
delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Shares for each participant properly
correspond with amounts withheld from the participant's Compensation and
establish such other limitations or procedures as the Board or its
committee determines in its sole discretion advisable which are consistent
with the Plan.
(c) In the even the Board determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Board may, in
its discretion and, to the extent necessary or desirable, modify or amend
the Plan to reduce or eliminate such accounting consequence including, but
not limited to:
(i) altering the Purchase Price for any Offering Period including an
Offering Period underway at the time of the change in Purchase Price;
(ii) shortening any Offering Period so that Offering Period ends on a new
Exercise Date, including an Offering Period underway at the time of
the Board action; and
(iii) allocating shares.
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Such modifications or amendments shall not require shareholder approval or
the consent of any Plan participants.
20. NOTICES. All notices or other communications by a participant to the
Company in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof. Notices given by means of the
Company's "Intranet", e-mail or similar system will be deemed to be written
notices under the Plan.
21. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to approval
by the shareholders of the Company within twelve months before or after the date
the Plan is adopted. Such shareholder approval shall be obtained in the manner
and degree required under Ontario Law.
22. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
23. TERM OF PLAN. The Plan shall become effective upon the earlier to occur of
its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in Section 21. It shall continue in effect for a term
of twenty (20) years unless sooner terminated under Section 19.
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